I'm not sure I agree.
You see, LoS's story wasn't just about Gabriel getting screwed over. It's actually about Gabriel screwing himself over -- and that's what makes the whole plot interesting in the first place. Sure, he was betrayed by Fate, manipulated by Zobek, tricked by Satan -- but the fact remains that none of all this would have happened had he simply chosen to stay put and mourn Marie's death like any other. But no; it was Gabriel who chose to undertake that impossible quest, who chose to let his rage take precedence over his love, who chose vengeance and destruction over life and humanity. All throughout the game you witness that subtle internal struggle as Gabriel slowly and irrevocably sinks into darkness, and that's, in a way, what makes the narrative special. Finally, It was Gabriel who, while forced to become a vampire, had already fallen so deep into chaos that he embraced this change, and became corrupted by the Forgotten One's power. And, most importantly, it was Gabriel who swore revenge against God, who sought to fight humanity for hundreds of years, leading him to commit the most atrocious of crimes. We feel sympathy for him, because we can't help but feeling that all of this wasn't his fault, but it actually is all his fault, crucially so, and that's what makes him such a wonderfully ambiguous character.
So LoS doesn't end in tragedy, no (if anything, it was a cliffhanger); LoS is part of a tragedy, but it's only the first act, and LoS2 is to be its conclusion. That's essentially what made the game's premise so enticing.
In context, then, why would Gabriel deserve to "live happily ever after"? He's committed countless atrocities, bathed himself in bitterness and hate, become abhorred to the humanity he was once part of; so why would he deserve happiness? Even Gabula himself understands it, and it's even one of the reasons why he chose to condemn himself to his own fate: there is no redemption for him, and there can never truly be. Dracula isn't, can't be, and simply shouldn't be "happy", or at least not unambiguously so -- the entire Lords of Shadow story arc is a tragedy, and it should have ended like one. And remember, in a tragedy, no one wins. It's always terrible, it's always tragic, but, in the end, it's far more fulfilling.
That said, the original ending isn't unilaterally tragic -- and there's definitely a sense of closure when you know where to look. Satan is defeated, Alucard ascends to heaven, content; Dracula is freed from his curse, and finds, if not death, some measure of peace. But as for the eternal torture, even I'm a bit skeptical.
Incredible. Absolutely incredible.